Possible increase on export tax of Russian scrap

Possible increase on export tax of Russian scrap

The Russian mills have been complaining a lot about the reduced availability of scrap and consequently higher prices in the local market for the last few months. Both scrap traders and the executives of Russian plants are convinced that scrap prices will remain under pressure in the short and mid term as well. It is a fact that the demand has increased in local market this year. Market analysts confirm that the demand is at a very high level and expected to go even higher until the end of the year before winter shows its impact. On the other hand, the supply side possesses even more problems. The total collection figures of scrap is reported at around 5% lower level compared to last year and 10% less than the previous. Moreover strong international market demand attract suppliers interest, too. Mills have also been complaining that some scrap traders have taken advantage of the shortage situation in the market and pushed prices upto a level equivalent almost to $75/mt by the beginning of October. Under these circumstances, Russian mills have started to put pressure on the local authorities to take some measures in order to find a solution to the problem, SteelOrbis is reported. Market sources are of the opinion that, Russian authorities may soon decide to increase the export tax on scrap in an effort to ease the shortage situation in local market. At the moment, there is a 15% tax on scrap exports in Russia. Traders say; Russian mills are pressing for 5-10 points increase. It is obvious that the export supply from Russia will be even further reduced in case Government is convinced by the mills.